China’s Silver Lining

An hour and a half out of central Beijing, traveling through orchards of apples and pears and still the smog blankets the fields obscuring the view. Pollution like this I have never seen.

And yet the intensity of the pollution makes me optimistic. Pollution in China isn’t like the demise of the snail darter or some wispy thing that might take a few weeks off your life if you live long enough. Pollution here irritates, it chokes and it kills young and old. Pollution like this people are willing to pay to avoid and as the economy grows the Chinese are willing to pay more and more. James Fallows, who is living in Beijing, suggests that pollution could be China’s Silver Lining, and ours. I read the piece before arriving but after being here a while it rings true.

Some of my most enduring memories of the 17 months I lived in China were of the little old ladies who wore face masks when they swept the streets of the country town I lived in. The police in Beijing and Shanghai also wore face masks when doing traffic control. That was, when the motorists bothered to pay attention to them.

Again, that was over 15 years ago. Per capita incomes in the country were probably one fifth of what they are today and far fewer automobiles were in use. Even then, there was often a haze to the air. I can only imagine what the pollution is like today.

I read James Fallow’s article and it is a good one. I still try to stay in touch with what’s happening with the country. The more things change with China, the more they stay the same.

Great article. I wonder if the graph of environmental load per capita has the same trend as population growth in the last 20 years. Right now, we’re freaking out about the current value and even the slope of the line, but the second differential looks pretty promising. If we can make it over the huge environmental hump of the next 20 years or so without major impacts, I’m pretty optimistic about the long-term outlook.

Best sentence in the article, in my opinion: “Underpriced energy is the world’s largest subsidy for environmental destruction.” I wish this were something the world community would address more actively. Clearly, you can’t just raise energy prices on poor people to market rates overnight, but it seems like many countries aren’t even trying. Perhaps moving towards true energy pricing will be the silver lining of current price spikes.

Well it’s pretty well established that there’s an “environmental Kuznets’ curve” where pollution increases with income increases then levels off and declines.*

I don’t see any reason for China to seriously buck this trend, although of course the key issue of when pollution starts levelling off is up for debate… Certainly environmental activism appears to be one area where the Chinese middle class are starting to turn their political energies, with the (at least partial) tolerance of the state. Energy pricing and security (at least from the state’s point of view) is an issue too.

*at least for pollution whose effects aren’t externalised outside the relevant political-economic body – eg. greenhouse emissions are especially difficult because they’re diffuse and long-term. There’s also always the possibility of a country coming up with a model that segregates the rich and the poor more successfully, leaving the poor stuck in pollution. I don’t see that as particularly applicable to China though.

“What the United States has done for decades with oil and gasoline—namely, keep prices as low as possible, so its citizens can live the good life—the Chinese government has done with even more necessities. Gasoline is cheaper than in the United States, because the government subsidizes the refineries. Water, electricity, agricultural fertilizer, and above all coal—they all cost Chinese consumers less than their “real† cost to the country, in both environmental and economic terms.”

But in the US it’s water that’s subsidized more than oil and gasoline. He makes it seem as though the US subsidies oil and gasoline a lot but water not at all. Oil and gasoline are perhaps insufficiently taxed to pay for externalities, but I think that that’s different than China’s subsidies.

We recently endured (are enduring) a natural experiment on the effects of higher fuel prices.

They have spurred the move toward more efficient technolog, however we now know some of the unintended consequences which we need to deal with. We also need to consider whether higher prices will strengthen this movement or have little additional effect (i.e. Has the move has already happened and will further price pressure be of no value?).

But in the US it’s water that’s subsidized more than oil and gasoline. He makes it seem as though the US subsidies oil and gasoline a lot but water not at all. Oil and gasoline are perhaps insufficiently taxed to pay for externalies, but I tnk that that’s different than China’s subsidies.

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